Reforms Push Greek Milk Prices Up

ATHENS – Measures aimed at reducing the price of milk in Greece – an industry critics said is controlled by a colluding cartel – have backfired and resulted in higher prices instead, pushing many to turn to evaporated milk as a substitute.

Hellenic Statistical Authority data showed that the average price of fresh milk in June climbed by 4.46 percent compared with the same month in 2013.

In April, just after the law to extend the sell-by date for fresh milk from five to seven days and introduce pasteurized milk that will be collected and packaged within 24 hours and have a two-day shelf life, prices had climbed by 2.08 percent from January 2014.

The price hikes are driving down demand from consumers. Figures from market research specialist IRI showed a 1.2 percent or 2-million-liter decline in sales of unflavored milk in the first half of the year compared to the same period in 2013.

Consumption of fresh and UHT milk, which together account for the biggest market share, have fallen 1.6 percent annually while sales of evaporated milk have gone up 0.2 percent during that period.

Greek milk prices have been as high as 31.5 percent above the average in the European Union, along with cheese and eggs but the government has done little to control it, even during a crushing economic crisis which made the everyday commodities too expensive for many families.

There was no explanation from the government why the prices have gone up despite reforms demanded by international lenders as a way to bring them down. Dairy farmers insist they are not gouging the public.

In 2011, Reuters reported that many Greeks assume that milk prices are rigged, after a fine of 75 million euros ($101.4 million) that the Competition Commission slapped on several firms four years before that for fixing prices between themselves and with supermarkets.